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The Structure of Research and Transfer Policies in International Agriculture: Evidence and Implications

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  • Lee, David R.
  • Rausser, Gordon C.
Abstract
This paper addresses the well-known paradoxes of high rates of protection, underinvestment in agricultural research, and relatively high productivity that characterize developed country agriculture, while developing country agriculture is typically characterized by taxation of the sector, research underinvestment, and low sectoral productivity. The paper tests the proposition emergiog from political economy theory that productive policies (e.g., research) and redistributive policies (e.g., subsidies) can be viewed as complementary in that the latter compensate producers who lose from the price-reducing effects of the former. The economic relationships between agricultural research expenditure, total policy transfers, sector productivity, and other variables are examined for a sample of developed and developing countries. The results confirm the complementarity hypothesis and show that increased relative rates of research expenditure are associated with higher agricultural productivity, higher country incomes, and higher rates of agricultural protection found in developed countries. The reverse is shown to occur in lowincome countries. The results suggest that both policy and trade reforms in developed countries and increased agricultural research allocation and sector productivity in developing countries may be harder to accomplish than previously thought due to the complementarity phenomenon.

Suggested Citation

  • Lee, David R. & Rausser, Gordon C., 1992. "The Structure of Research and Transfer Policies in International Agriculture: Evidence and Implications," 1992 Occasional Paper Series No. 6 197731, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaaeo6:197731
    DOI: 10.22004/ag.econ.197731
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    References listed on IDEAS

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    1. Gordon C. Rausser & William E. Foster, 1990. "Political Preference Functions and Public Policy Reform," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 641-652.
    2. Peterson, Willis L. & Hayami, Yujiro, 1977. "Technical Change in Agriculture," A Survey of Agricultural Economics Literature, Volume 1: Traditional Fields of Agricultural Economics 1940s to 1970s,, Agricultural and Applied Economics Association.
    3. Pardey, Philip G. & Sandra Kang, M. & Elliott, Howard, 1989. "Structure of public support for national agricultural research systems: A political economy perspective," Agricultural Economics, Blackwell, vol. 3(4), pages 261-278, December.
    4. Philip G. Pardey & Barbara Craig, 1989. "Causal Relationships between Public Sector Agricultural Research Expenditures and Output," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 9-19.
    5. Oehmke, James F., 1988. "The calculation of returns to research in distorted markets," Agricultural Economics, Blackwell, vol. 2(4), pages 291-302, December.
    6. Gordon C. Rausser, 1982. "Political Economic Markets: PERTs and PESTs in Food and Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(5), pages 821-833.
    7. George W. Norton & Jeffrey S. Davis, 1981. "Evaluating Returns to Agricultural Research: A Review," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(4), pages 685-699.
    8. Julian M. Alston & Geoff W. Edwards & Professor John W. Freebairn, 1988. "Market Distortions and Benefits from Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 281-288.
    9. Malcolm D. Bale & Ernst Lutz, 1981. "Price Distortions in Agriculture and Their Effects: An International Comparison," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(1), pages 8-22.
    10. Honma, Masayoshi & Hayami, Yujiro, 1986. "Structure of agricultural protection in industrial countries," Journal of International Economics, Elsevier, vol. 20(1-2), pages 115-129, February.
    11. James F. Oehmke, 1988. "The Calculation of Returns to Research in Distorted Markets," Agricultural Economics, International Association of Agricultural Economists, vol. 2(4), pages 291-302, December.
    12. Gordon C. Rausser, 1982. "Political Economic Markets: PERTs and PESTs in Food and Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(5), pages 821-833.
    13. Gordon C. Rausser, 1982. "Political Economic Markets: PERTs and PESTs in Food and Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(5), pages 821-833.
    14. Vocke, Gary, 1990. "Trade and Development: Impact of Foreign Aid on U.S. Agriculture," Staff Reports 278337, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Rausser, Gordon & Simon, Leo & Ameden, Holly, 2000. "Public-private alliances in biotechnology: Can they narrow the knowledge gaps between rich and poor?," Food Policy, Elsevier, vol. 25(4), pages 499-513, August.
    2. Rausser, Gordon C. & Roland, Gerard, 2009. "Special Interests versus the Public Interest in Policy Determination," Agricultural Distortions Working Paper Series 50294, World Bank.

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